Thursday, January 13, 2011

AQM Copper (AQM.v): Half of 3.25Bn lbs copper? Sorry guys, you're going to have to do better than that

The delayed 43-101 copper count for AQM Copper's (AQM.v) Zafranal project in Peru came out today. Read the thing and find out more for yourself, but the basic takeaway is that M+I+I resource comes to 3.25Bn lbs copper. As AQM controls half of that number (it's a 50/50 split with Teck), AQM is now being valued on this 1.6Bn lbs copper or so. Here's some quick and dirty math:
  • Shares out 104.96m
  • Current PPS: $1.12
  • Market Cap $117.5m
  • In situ value for each Lb copper : 7.34c

Now for sure this doesn't take in the upside potential of finding more copper at the main zone or at the satellite zones. It doesn't take in the decent cash position AQM holds, either (I know there are those of you prefer the EV/lb in situ variant), but this guy looks overvalued to peers at this stage. Meanwhile, let's check the 5 day action in the stock to see what went on yesterday (just before today's announcement) and this morning:

Which is the kind of thing that happens when you employ people from ECU Silver. DYODD.

UPDATE: While putting a quick polish on the post before publishing, this happened:

Tell 'em Owly: